Tuesday, July 3, 2012

How to judge effectiveness of fiscal policy?

Here is Abba Lerner (1943):

“The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and its withdrawal of money, shall all be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine about what is sound or unsound."

Source: Abba Lerner (1943). “Functional Finance and the Federal Debt.” Social Research 10(1): 38–51.